‘We have sent information memoranda to more than 10 potential joint venture partners, all big players,’ says Majed al-Ahmadi, president and chief executive officer at PMD. ‘We hope to reach a binding agreement with one or more partners early next year.’
The partner is expected to provide 50 per cent of the required $1,000 million equity on the project, with the remainder to be provided by PMD and investors. The joint venture partner will also act as offtaker for the bulk of the products and assist in operation and maintenance.
PMD is in the process of appointing a private placement agent which will support the company in raising equity from local and regional sources. Investors from the UAE and Kuwait are understood to feature prominently among the interested parties. On the debt side, which will make up 70 per cent of the project’s financing, Arab Banking Corporation (ABC), the financial adviser, is working on the arrangements.
Work is also progressing on other fronts, says Al-Ahmadi. US-based Foster Wheeler, which was recently appointed technical adviser on the project, has started to carry out conceptual and operating designs and other technical elements on the project. The legal adviser, Clifford Chance, is working on the project’s ownership structure, while a marketing strategy is being drawn up by US-based CMAI. Audit firm Ernst & Youngwas appointed as economic consultant in October to complete a pre-feasibility study on the project.
The MoU with Linde – aimed at jointly developing the complex – expired earlier this year after PMD offered no exclusivity guarantees for the German contractor for any of the project’s packages.
The complex will comprise a 1.35 million-tonne a year (t/y) cracker, a 970,000-t/y polyethylene (PE) plant, a polypropylene (PP) plant with capacity of at least 500,000 t/y and a 530,000-t/y ethylene oxide unit for the production of ethylene glycol, ethanolamine, methylamine and derivatives and ethoxylates. In addition, PMD plans the construction of a facility to produce 300,000 t/y of bisphenol A, which is primarily used for polycarbonate and epoxy resins.
Feedstock arrangements have been completed with Saudi Aramco for the supply of ethane and mixed butane. The project is due to come on stream in 2008.